Frequently Asked Questions

Money laundering is the process of making dirty money appear clean. Criminals clearly wish to secure the profit of their nefarious activities. Through money laundering, criminals process the criminal proceeds in order to disguise their illegal source.

In the initial - or placement - stage of money laundering, the launderer introduces his illegal profits into the financial system. After the funds have entered the financial system, the second - or layering - stage takes place. In this phase, the launderer engages in a series of conversions or movements of the funds to distance them from their source. Having successfully processed his criminal profits through the first two phases, the launderer then moves them to the third stage - integration - in which the funds re-enter the legitimate economy. For more information, please contact the FIU.

Terrorist financing is the process of financing terrorist acts. One of the main differences between this and money laundering is that the source of the money used in terrorist financing may be perfectly legitimate. The source of money in money laundering is always an illegal source.

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. The Task Force is therefore a "policy-making body" which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Since its creation the FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. It established a series of Recommendations, known as the 40+9 Recommendations in 1990, revised in 1996 and in 2003 to ensure that they remain up to date and relevant to the evolving threat of money laundering that set out the basic framework for anti-money laundering efforts and are intended to be of universal application. The FATF has 36 members. Barbados is not a member of the FATF. Barbados is a member of the Caribbean Financial Action Task Force, an FATF- Style Regional Body that is an associate member of the FATF. For more information, direct your search to www.fatf-gafi.org.

The Caribbean Financial Action Task Force (CFATF) is an organisation of twenty-nine states of the Caribbean Basin, which have agreed to implement common countermeasures to address the problem of criminal money laundering. Barbados is a member of the CFATF. For more information, direct your search to www.cfatf-gafic.org.

A Financial Intelligence Unit (FIU) is a central, national agency responsible for receiving (and, as permitted, requesting), analyzing and disseminating to the competent authorities, disclosures of financial information: (i) concerning suspected proceeds of crime and potential financing of terrorism, or (ii) required by national legislation or regulation, in order to counter money laundering and terrorism financing. (Source: The Egmont Group of Financial Intelligence Units)

• The Judicial Model is established within the judicial branch of government wherein "disclosures" of suspicious financial activity are received by the investigative agencies of a country from its financial sector such that the judiciary powers can be brought into play e.g. seizing funds, freezing accounts, conducting interrogations, detaining people, conducting searches, etc. >
• The Law Enforcement Model implements anti-money laundering measures alongside already existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent or sometimes competing jurisdictional authority to investigate money laundering.
• The Administrative Model is a centralized, independent, administrative authority, which receives and processes information from the financial sector and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a “buffer” between the financial and the law enforcement communities.
• The Hybrid Model serves as a disclosure intermediary and a link to both judicial and law enforcement authorities. It combines elements of at least two of the FIU models. (www.egmontgroup.org)

We are an administrative Financial Intelligence Unit.

Recognising the benefits inherent in the development of a FIU network, in 1995, a group of FIUs met at the Egmont Arenberg Palace in Brussels and decided to establish an informal group for the stimulation of international co-operation. Now known as the Egmont Group of Financial Intelligence Units, these FIUs meet regularly to find ways to cooperate, especially in the areas of information exchange, training and the sharing of expertise. There are currently 116 member FIUs. Barbados is a member of the Egmont Group. For more information, direct your search to www.egmontgroup.org.

Financial Institutions are those entities identified in Section 2 of the MLFTA that are required to adhere to a number of obligations including record-keeping of financial transactions, implementing a compliance program and reporting to the FIU of Barbados.

"..Any business transaction where the identity of the person involved, the transaction or any other circumstance concerning that business transaction gives any officer or employee of the financial institution reasonable grounds to suspect that the transaction

1. involves proceeds of crime;
2. involves the financing of terrorism; or
3. is of a suspicious or an unusual nature;"

Any person who carries on business under the Financial Institutions Act; and(b) includes

1. a deposit taking institution;
2. any person whose business involves money transmission services, investments services or any other services of a financial nature*;
3. a credit union within the meaning of the Co-operatives Societies Act;
4. a building society within the Building Societies Act;
5. a friendly society within the meaning of the Friendly Societies Act;
6. an insurance business within the meaning of the Insurance Act;
7. an off-shore bank within the meaning of the Off-shore Banking Act;
8. an exempt insurance company within the meaning of the Exempt Insurance Act;
9. an international business company within the meaning of the International Business Companies Act;
10. a society with restricted liability within the meaning of the Societies with Restricted Liability Act;
11. a foreign sales corporation within the meaning of the Barbados Foreign Sales Corporation Act;
12. a mutual fund, mutual fund administrator and a mutual fund manager;
13. international trusts within the meaning of the International Trusts Act;

* includes attorneys-at-law, accountants, real estate agents, dealers in precious metals and stones, trust and company service providers, etc.

The FIU receives information either from individuals who have disclosed their identity to the FIU or from anonymous individuals with respect to money laundering and terrorist financing. There is however no obligation for the FIU to provide feedback in such circumstances.

Yes. It is known as the Suspicious/Unusual Transaction Report (STR) Form. Please proceed to the "Filing a Report" section of this website.

Reports can be forwarded to the FIU's mailing address. Alternatively, one may forward the report by facsimile in urgent cases.

There are legislative provisions under the MLFTA prohibiting financial institutions from informing anyone including the client of the filing of the STR. Penalties or imprisonment accrue for failure to adhere with these legislative provisions.

The FIU's processes to protect the information in the STR are inter alia:-

• The maintenance of high standards relating to confidentiality, security and integrity within the FIU and with its stakeholders.
• Access to the FIU and its information is monitored and controlled.
• In accordance with the MLFTA, information is only disclosed to, received by and disseminated from the FIU in the course of the duties of the relevant officer/agency relating to matters that may involves proceeds of crime, the financing of terrorism or is of a suspicious or an unusual nature.

• AML/CFT-Anti-Money Laundering/Counter-Financing of Terrorism
• APG-Asia Pacific Group
• ATA-Anti-Terrorism Act
• CDD-Customer Due Diligence
• CFATF-Caribbean Financial Action Task Force
• DNFBPs-Designated Non-Financial Business Persons
• EG-Egmont Group
• ESAAMLG-Eastern and South African Anti-Money Laundering Group
• EAG-Eurasian Group
• FATF-Financial Action Task Force
• FIU-Financial Intelligence Unit
• FSAP-Financial Sector Assessment Programme
• FSC-Financial Services Commission
• FSRB-FATF-Style Regional Body
• GAFISUD-Financial Action Task Force of South America
• KYC-Know Your Customer
• KYCC-Know Your Customer's Customer
• KYE-Know Your Employee
• MENAFATF-Middle East and North Africa Financial Action Task Force
• MLAT-Mutual Legal Assistance Treaty
• MLFTA-Money Laundering and Financing of Terrorism (Prevention and Control) Act
• MLRO-Money Laundering Reporting Officer
• MONEYVAL-Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures
• MOU-Memorandum of Understanding
• MSBs- Money Service Businesses
• MVTs-Money or Value Transfer Services
• NCCT-Non-Cooperative Countries and Territories
• OFAC-Office of Foreign Assets and Control
• OGBS-Offshore Group of Banking Supervisors
• PEP-Politically Exposed Person
• ROSC-Rules and Observance on Standards and Codes
• SAR-Suspicious Activity Report
• STR-Suspicious Transaction Report
• TF-Terrorist Financing